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A Beginner's Guide to the Technical Analysis of Stocks

01 Dec 2023

Investing in the stock market and having informed decisions govern each of your investment actions is no easy feat. By equipping yourself with a technical analysis of stocks it might ease your investment journey and allow you to reap more rewards. Open a demat account such that you can do the same with immediacy. Demat accounts allow for investing and trading decisions to be made from the comfort of one’s home.                                                                                                                     

  • Technical Analysis of the Financial Markets:

Technical analysis involves predicting the movements of stock prices by considering and studying historical data pertaining to the same of which price and volume are key factors.

With the aid of technical analysis, it is possible to identify the gap that persists between the intrinsic value of a stock (should it exist) and the market price of the same by using varied tools that allow for statistical analysis in addition to using behavioral economics.

By engaging in technical analysis of stock trends, you are able to identify certain recurrent indicators and price routines. Although this process of identification might not be apparent immediately, it can allow for major gains.

In order to master technical analysis, it is important to stick with a particular style of trading and remain committed to a strategy without allowing for emotions or guesswork to get in the way.

  • Technical Analysis Simplified:

Investors and traders alike may either follow the top-down or bottom-up approach when considering technical analysis depending on the time frame their trades are planned for. The former has a macroeconomic analysis in place prior to considering sole securities whereas the latter begins with a focus on these individual stocks.

  • A strategy is then selected based on the trader or investor’s choice.
  • Securities are then identified that are in alignment with the strategy.
  • A brokerage might be consulted and used provided they support the security that is presently desired.
  • Trades are then kept a close watch on.
  • Software and tools might further help monitor and track trades and securities.


Open a Demat account online such that you can begin trading the stock market. It is important to do due diligence prior to making any buy, sell or hold decisions pertaining to securities  you might have your eye on. This preliminary research can reduce the potential of your incurring any risks and / or losses and can potentially allow you to accrue greater returns. Now that you have a better understanding of the significance of the technical analysis of stocks, you can begin incorporating it when you (or a professional on your behalf) can look at market conditions, your financial goals and assess your risk tolerance prior to attempting to benefit from bonus shares.

Related Articles: Best Technical Indicators for Stock Market | Fundamental Analysis or Technical Analysis or Both? | What is the Significance of Stock Chart Technical Analysis? | 8 Basic Differences between Fundamental and Technical Analysis 


Popular Stocks:  ICICI Bank Share Price | HDFC Bank Share Price | Britannia Share Price | Divislab Share Price | Tata Consumer Share Price

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